If your organisation deploys contract workers — through labour contractors, manpower agencies, or third-party service providers — you carry statutory obligations as a Principal Employer under the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA).

This is one of the most commonly misunderstood compliance areas in India. Many organisations believe that since workers are employed by contractors, they have no liability. This is legally incorrect. A Principal Employer is directly responsible for ensuring contractor compliance — and faces penalties and regularisation orders if contractors fail.